Shell & Systems

I listened to BBC's World Business Review last night covering the Shell overstatements of the size of their oil reserves.

It was a telling conversation between three economic experts.

The American focused on the poor "ethics and moral" of the people involved, conveniently placing the responsibility on particular individuals (no need to look any further, no need for any changes beyond their hiring policies).

The two others focused on the internal structure and processes within Shell.

They all followed the unwritten rule in the economic world: Look at the symptoms, not the cause. Place the responsibility on specific individuals or (if you have to) corporations. Don't look at the deeper systems causes.

Of course, if we do look at the system these individuals and corporations are embedded in, we see a relatively simple reason for the scandals involving Enron, WorldCom, Shell and many other corporations.

They operate within an economic system where there is one priority: Maximizing profits for the shareholders.

When you make a decision, it must be evaluated on how effectively it will increase profits. Any other considerations are secondary.

Even for those many individuals within these corporations who has a good heart and the best of intentions, they still operate within a system where their choices are dictated by the primary principle.

This is a pattern brought to our collective awareness after WW2 when they explored how regular decent people could work within the Nazi system.

And -as with many in the Nazi system - workers in contemporary corporations feel compelled to follow the rules in spite of personal misgivings. After all, if they risk suffering adverse personal consequences (it their case, loose their job).

These processes, working within any corporation, has continuing and devastating consequenses for ecosystems and workers all over the world. Tellingly, it is when it finally has consequences for the shareholders that it receives this amount of media attention.